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INV3702 ASSIGNMENT 1 SEMESTER 2 2022
Preview 2 out of 14 pages
INV3702 ASSIGNMENT 1 SEMESTER 2 2022Assignment 1 Calculations Floating rate = Reference rate + Quoted margin Floating rate = 6.5% + 1.25% = 7.75% The next semi-annual coupon = 0.075 2 x 1 000 000 = 38750 A+ Explanation The correct answer is that they have shorter maturities on average. A+ Get in touch on for assistance and any queries. Calculations The safest approach is to calculate the yield for all bonds: Using a financial calculator: PV PMT N FV I/Y (Yield) Bond A - 000 5.72% Bond B - 000 7% Bond C -900 30
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